In the cryptocurrency world, there are so many options when it comes to wallets, trading apps, and exchanges. One of these options that has recently gained popularity is an app called Voyager.
But what is Voyager exactly? Is it an exchange? Keep reading to learn more about this cryptocurrency application, the people behind it, and our advice as to whether or not you should use it.
What is Voyager?
First and foremost it’s critical to establish that Voyager is not a cryptocurrency exchange. Rather it is a stock broker that uses a blockchain bridge connect with over 50 different exchanges in order to trade your cryptocurrency. This means Voyager will quote you a price for the cryptocurrency you want to buy through this market connection. You pay no fees for trades on Voyager.
In addition to helping you buy and sell cryptocurrencies; Voyager is also a cryptocurrency loan platform. If you purchase cryptocurrency through Voyager, you can leave your coins on the platform and choose to loan them out to other traders. In exchange, you will receive some of the interest the individual pays to have the loan.
The option to earn interest on your cryptocurrency is only available for certain currencies, and the interest rate varies on the cryptocurrency you choose to loan. Less volatile currencies like USDC offer an interest rate of 9%, while more volatile ones like Bitcoin pay 6%.
This interest you are earning is paid in the local cryptocurrency of the platform, called the Voyager Token (VKG). You can then convert this to USD and cash it out. Voyager also plans to offer a Mastercard debit card in the future which will allow its users to spend their cryptocurrencies, as well as their VKG anywhere where Mastercard is accepted.
Currently, the Voyager platform is only available as a mobile app. While this keeps things convenient for users to trade on the go, many miss the fact that most other investment platforms have a web version that can be easier to use for large trades. As of the writing of this article, the Voyager app can only convert USD transferred from a bank account to cryptocurrency, and there is no way to trade cryptocurrency for cryptocurrency as there is on other apps.
How Does Voyager Make Money?
With such high-interest rates offered to customers, it’s easy to ask if Voyager is too good to be true. But to know that you have to look at how Voyager makes its money.
Voyager uses arbitrage when it buys currencies for people. This means that the app looks for discrepancies in the market when buying cryptocurrencies. When it finds a discrepancy that is favorable, it buys the currency, passing some of the savings on to the buyer while keeping some as the profit of the platform. This small amount taken from the savings is how the platform makes money and keeps its trades “fee free”.
Besides that, the platform also makes money through its cryptocurrency loans. While it may offer users 9% for locking their USDC in a smart contract loan, they are likely making twice that by charging 18% or more for someone to take out a loan.
Who Invented Voyager?
Voyager was founded by Stephen Ehrlich, Philip Eytan, Gaspard de Dreuzy, and Oscar Salazaar, all of which came together to form the company Crypto Trading Technologies. All of them came to the project with a background in the finance industry.
All four men are still involved in the project and there are no other additional team members listed on the Voyager website.
What is VKG?
VKG is the native cryptocurrency used on the Voyager platform. It is a utility token, meaning it is used only on the Voyager platform to allow users to access certain features and be paid out the interest they are owed.
In 2021, the Voyager platform experienced a change of contract and all holders of the coin were required to change their old tokens for new ones. If you were a holder of VGK before August 2021, this includes you. Any tokens on the Voyager platform were automatically changed, but if you keep yours in another location, you may want to ensure they’ve been switched out.
It is not recommended to invest in VGK unless you are involved in the Voyager platform as you will find that it isn’t very useful in other situations.
Should You Use Voyager?
While Voyager does offer very attractive interest rates and seems to be on the up and up, it is always good to be cautious of cryptocurrency projects, especially newer ones like Voyager.
To date, there have been no major hacks or occurrences with the Voyager platform, but remember that using any sort of cryptocurrency platform is not without its risks. Because investing in cryptocurrency is already quite risky, there are many platforms that are worse than Voyager, especially because Voyager is FDIC insured and registered—meaning they have to pay out any money that customers invest on the platform and you as an investor are somewhat protected.
That being said, Voyager is not part of the DEFI world. If you are interested in an account, they do rely on KYC and AML policies and will collect your information. You will be responsible for any taxes you incur as a result of trades on the platform.
Keep in mind that if you do decide to use Voyager, their interest rates are not 100% guaranteed, and their website says “up to” the specified rate, meaning you may find that you don’t make as much money as promised and that you could make more money on a different but similar platform.
Even though Voyager claims to be fee free, this is not actually true, rather the fees are automatically included with any transfer. Bear this in mind when you want to sell your cryptocurrency, as you will not have much choice with how much you sell it for.
It will be interesting to see how the Voyager Debit Card works when it is released, as this may be what sets the platform apart. But for now, although it seems Voyager is on the up and up, proceed with caution and ensure you understand every aspect of the platform before you invest.
Overall, the decision belongs to you as to whether or not you decide to use the Voyager app. Just know that any sort of purchase or investment in cryptocurrency is risky and ensure you know the risks before you buy.